Economy upbeat: ICCB

The Bangladesh economy is on a rebound as the first five months of the current fiscal year were upbeat, which seems to be taking cue from emerging Asia, an editorial of International Chamber of Commerce-Bangladesh (ICCB) said yesterday.
“By all indications, the country weathered the global crisis largely unscathed and is ready for a robust expansion of output and investment, as one of the emerging market economies,” it added.
According to projections, growth during the current fiscal year is expected to be 6.0 to 6.7 percent. However, it was earlier projected that with adequate energy supplies and certain physical infrastructure in place, Bangladesh could attain double digit growth over a shorter period, the editorial said.
The main source of energy for industrial growth in Bangladesh is natural gas. There have been various estimates of the size of the natural gas reserves of Bangladesh, the statement added. In mid-2004, Petrobangla estimated the proven gas reserve at 15.3 TCF. Survey conducted by US Geological Survey in 2,000 had estimated that Bangladesh has a 15.3 TCF additional “undiscovered reserve”. On the other hand, a study by the Hydrocarbon Unit of the Energy Ministry and the Norweign Petroleum Directorate said the gas reserve (proven plus probable) of the 22 gas fields was estimated at 28.4 TCF.
Currently, Bangladesh is producing around 2,000 mcft of gas daily against demand for 2,500 mcft. The average annual demand of gas has increased at 8 percent in the last few years. An inadequate supply of gas has compelled a number of industrial units to convert power generating units from gas to diesel, requiring uncalled for additional investment, the ICCB editorial said.
Stand-by generators in many industries are operating round-the clock, causing serious break downs, due to power cuts. Besides, suspension of a gas supply to KAFCO and other fertilizer factories is causing a drain of foreign exchange as well as a shortfall in export earnings, the editorial added.
To meet the severe gas crisis, the government announced continuation of the suspension of new connections to industries, and commercial and household consumers. Liquid petroleum gas (LPG) will be promoted as an alternative for household use. Petrobangla has also planned to increase LPG production, including additional bottling plants, but there is no time-line, it said.
Petrobangla is expected to go for a fresh gas block bidding by June and the energy ministry will organise different road shows at home and abroad from July. But the outcome of previous road shows is unknown. Practical measures have to be undertaken without further loss of time, to harness gas to feed the country's movers of growth, the ICCB editorial said.
Chittagong is also suffering from a chronic gas and induced power crisis. The government has abandoned the LNG import programme, as it was not cost-effective. Instead, there are now plans to set up a LNG plant at Maheskhali, according to the editorial.
The plan of procuring coal mines and gas fields abroad seems ambitious, which even India and China cannot afford. Instead, immediate steps should be taken for utilisation of the huge quantity of coal in the country, which is considered to be one of the best, but could not be utilised for the cheap politics of so-called environmentalists. It may be mentioned that in India, 64 percent of power comes from coal, in China 81 percent, in Australia 76 percent, in the USA 49 percent and in South Africa it 94 percent, according to the ICCB editorial.
If the country really desires to become a middle income country, it should aim for a GDP growth of 8 percent or more, and that is possible only if there is an assured supply of energy and related physical infrastructure, said the editorial.